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February 13, 2018

Over $101bn will be spent on South America’s upcoming upstream projects by 2025

By GlobalData Energy

GlobalData expects that an average capex of $12.7bn per year will be spent on 74 upcoming oil and gas fields in South America between 2018 and 2025. Capital expenditure into South America’s conventional and heavy oil projects will add up to $82.7bn and $16.3 respectively over the eight-year period. Conventional gas projects will require $2.6bn, while the investments into unconventional gas projects will total $7.2mn in upstream capital expenditure by 2025.

Brazil will account for over 78% of the $101bn of capital expenditure in South America. The country has 49 announced and planned fields. The top fields in terms of capex for the period are Lula Central with $18.9bn, Lula Oeste with $6.5bn and Buzios V (Franco) with $5.6bn. All three projects are ultra-deepwater projects with conventional oil reserves.

Guyana has an 8% share in South America’s planned and announced capex over the eight-year period. The country has three planned and announced fields: Liza Phase 2, Liza and Payara with capex of $3.5bn, $2.9bn and $1.7bn respectively. All three are conventional oil projects located in ultra-deepwater.

Venezuela is expected to contribute about 5.6% to the total capex spending in South America between 2018 and 2025. The country has four planned and announced fields. Shallow water conventional gas Loran has a capex of $1.9bn. Three heavy oil onshore projects, Junin-10, Ayacucho-6, and Junin-1, will need $1.5bn, $1.2bn and $1.1bn in capex by 2025.

The remaining countries; the Falkland Islands, Ecuador, Argentina, Peru, Chile and Colombia, together have a capex $8.4bn, about 8% of the total capex spending in South America for the period.

Capital Expenditure into Upcoming Projects  by 2025

Source: Upstream Analytics                                                                                                                 © GlobalData

GlobalData expects that over their lifetime, the 74 upcoming oil and gas projects in South America will require $209bn in capex to produce over 17,301 million barrels of crude and 12,162 billion cubic feet of gas.  Upcoming ultra-deepwater projects in South America will have the highest total capex at $147bn. Onshore projects will require $28.9bn over the lifetime, while deepwater and shallow water projects carry a total capex of $19.3bn and $14.1bn respectively.

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